Tax aspects

Taxation system applicable to capital gains on shares or units of undertakings for collective investment (unit trust company (SICAV) and mutual fund)

Since 1 January 2006, the taxation system applicable to capital gains on shares or units of undertakings for collective investment (UCI’s) has undergone radical changes. After introducing a withholding tax on such capital gains, the Belgian legislator changed the contents of this legislation three times primarily for the purpose of broadening its scope.

Below, we will briefly explain to you the basic principles of this withholding tax.

Summary of the basic principles

Since 1 January 2006, the taxation system applicable to capital gains on shares or units of undertakings for collective investment (UCI’s) has undergone radical changes. After introducing a withholding tax on such capital gains, the Belgian legislator changed the contents of this legislation three times primarily for the purpose of broadening its scope.

Below, we will briefly explain to you the basic principles of this withholding tax.

  • Review of the implementation of this withholding tax

1 January 2006: introduction of a 15% withholding tax on the capital gains made either on the surrender of own shares or units by certain UCI’s or on the liquidation of certain UCI’s (sub-funds). Reference is made to, inter alia, Community law UCI’s with the "European passport" and which invest more than 40% of their assets in debt securities (bonds, zero-bonds, etc.). The taxable amount is in principle limited to the part of the capital gain that corresponds to the interest yielded by the UCI investments in debt securities (bonds, zero-bonds, etc.).

1 January 2008: the taxable amount under the withholding tax is amended: in principle, it is henceforth calculated by taking into account all of the income generated from UCI investments in debt securities: interest, capital gains and capital losses. The concept of TISbis (taxable income per share) is introduced.

1 January 2012: the law of 28 December 2011 increases the withholding tax rate to 21% and introduces the additional tax of 4%.

20 December 2012: the law of 13 December 2012 reduces the investment threshold in debt securities of UCI assets to 25% and extends the taxable transactions to sales in return for payment on the secondary market for shares or units of certain UCI’s.

1 January 2013: the law of 27 December 2012 increases the withholding tax rate to 25% and removes the additional tax of 4%.

1 July 2013: the law of 1 Augustus 2013 extends the scope of the taxation on capital gains realised on Community law UCI’s without European passport.

  • Who is affected by this tax?

Any taxpayer liable in Belgium for personal income tax.

  • Which UCI’s are affected?

The withholding tax applies to capital gains made on the shares or units of the following UCI’s:

  1. UCI’s established in a European Economic Area with or without Europen passport on the condition they invest more than 25% in debt securities.
  2. UCI’s established outside of the European Economic Area on the condition that they invest more than 25% in debt securities.

  • Which UCI’s are not affected?

Therefore, the withholding tax does not apply to capital gains made on shares or units of UCI’s which invest less than 25% of their assets in debt securities.

  • Which transactions are affected?

The following transactions are affected:

- any surrender of own shares or units by an affected UCI,
- any total or partial liquidation (of a sub-fund) of an affected UCI;
- any sale in return for payment (on the secondary market) of shares or units of an affected UCI.

What are the consequences for your portfolio?

You want to know whether the UCI’s held in your securities portfolio are subject to this withholding tax?

Your ING investments liaison officer is best placed to provide you with the necessary explanations. Do not hesitate to contact them.

This information is based on the fiscal situation as we are currently aware of it.

Are you interested?

Make an appointment directly with the ING branch of your choice.

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